Deciphera Pharmaceuticals, Inc. Announces Fourth Quarter and Year-end 2018 Financial Results

– Enrollment Completed in INVICTUS Pivotal Phase 3 Clinical Study in
Fourth-line and Fourth-line Plus GIST; Top-line Data Expected in
Mid-2019 –

– INTRIGUE Pivotal Phase 3 Clinical Study Initiated in Second-line
Patients with GIST –

– Ended 2018 with Cash and Cash Equivalents of $294 Million –

WALTHAM, Mass.–(BUSINESS WIRE)–Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), a clinical-stage
biopharmaceutical company focused on addressing key mechanisms of tumor
drug resistance, today announced financial results for the fourth
quarter and year ended December 31, 2018 and provided an update on
clinical and corporate developments.

“2018 was punctuated by significant progress in advancing our diverse
pipeline of targeted drug candidates,” said Michael D. Taylor, Ph.D.
President and Chief Executive Officer. “We continued to add to the
growing body of data that we believe supports ripretinib’s potential to
provide improved, durable clinical benefit for GIST patients across
multiple lines of therapy. Notably, we initiated two pivotal Phase 3
studies in 2018, INVICTUS and INTRIGUE, in fourth-line and fourth-line
plus and second-line GIST, respectively.”

Dr. Taylor continued, “As we near the reporting of top-line data from
the INVICTUS study, expected in mid-2019, we are actively working to
build out our commercial capabilities for ripretinib’s potential launch
in the United States. In parallel, we continue to advance our earlier
stage pipeline candidates, DCC-3014 and rebastinib, and expect to
announce one new clinical candidate and commence IND-enabling studies
during 2019.”

Recent Clinical Updates

• Ripretinib (DCC-2618)
  • Deciphera announced completion of enrollment in the INVICTUS
    pivotal Phase 3 clinical study evaluating the safety and efficacy
    of ripretinib (DCC-2618), the Company’s investigational
    broad-spectrum KIT and PDGFRα inhibitor, in fourth-line and
    fourth-line plus gastrointestinal stromal tumor (GIST) patients.
    The Company expects to report top-line data from this study in
    mid-2019 and is building commercial capabilities to support the
    planned launch of ripretinib in the United States, if approved.
  • Deciphera announced the initiation of its INTRIGUE pivotal Phase 3
    clinical study evaluating the efficacy and tolerability of
    ripretinib compared to sunitinib in second-line GIST patients.
  • At the European Society of Medical Oncology (ESMO) 2018 Congress
    in October, Deciphera presented updated preliminary Phase 1
    clinical study results of ripretinib in patients with GIST that
    the Company believes demonstrate the potential of ripretinib to
    provide improved, durable clinical benefit for GIST patients from
    second-line through fourth-line-plus. These data were also
    presented at the Annual Meeting of the Connective Tissue Oncology
    Society (CTOS) in November 2018.
  • Deciphera expanded the ongoing Phase 1 study of ripretinib to
    include additional cohorts for patients with various solid tumors,
    including melanoma, non-small cell lung cancer, germ cell cancer,
    penile cancer, soft tissue sarcoma, and GIST or other solid tumor
    patients with renal impairment.
  • During a poster session at the EORTC-NCI-AACR Molecular Targets
    and Cancer Therapeutics Symposium in November 2018, Deciphera
    presented preclinical data on the effects of the combination of
    ripretinib and MAPK pathway inhibitors on cell death and apoptosis
    in cellular assays of GIST and mastocytosis.
• Rebastinib
  • Deciphera recently announced the initiation of two open-label,
    multicenter, Phase 1b/2 combination studies of rebastinib, the
    Company’s investigational small molecule switch control inhibitor
    of TIE2 kinase:
    • Phase 1b/2 study in combination with carboplatin in patients
      with advanced or metastatic solid tumors.
    • Phase 1b/2 study in combination with paclitaxel in patients
      with advanced or metastatic solid tumors. The Company expects
      to report initial data from this study in 2019.
• DCC-3014
  • Deciphera announced positive, preliminary, top-line data from the
    ongoing dose escalation portion of the Phase 1 clinical study of
    DCC-3014, the Company’s investigational small molecule switch
    control inhibitor of CSF1R, in patients with advanced
    malignancies. A review of further data from this Phase 1 study is
    planned to be presented at a medical meeting in 2019.
  • The Company also announced a plan to expand the Phase 1 study to
    evaluate DCC-3014 in patients diagnosed with Tenosynovial Giant
    Cell Tumors (TGCT).

Corporate Update

• Earlier this month, Deciphera announced the appointment of Steve
  Hoerter as President & Chief Executive Officer, effective March 18,
  2019. Mr. Hoerter, who currently serves as a member of the Deciphera
  Board of Directors, joins the Company from Agios, where he was Chief
  Commercial Officer. He will succeed Dr. Taylor, who will retire as
  President & Chief Executive Officer of the Company. Dr. Taylor will be
  available to support the transition and will remain as a member of the
  Company’s Board of Directors.

Fourth Quarter 2018 Financial Results

• Cash Position: As of December 31, 2018, cash and cash
  equivalents were $293.8 million, compared to cash and cash equivalents
  of $196.8 million as of December 31, 2017. This increase was primarily
  related to proceeds obtained from the Company’s June 2018 underwritten
  public offering, offset by cash used in operating activities. We
  expect our current cash and cash equivalents will enable us to fund
  our operating and capital expenditures and debt service payments into
  the second half of 2020.
• R&D Expenses: Research and development expenses for the
  fourth quarter of 2018 were $27.4 million, compared to $15.7 million
  for the same period in 2017. The increase was primarily due to an
  increase in spending on the ripretinib (DCC-2618) program of $5.8
  million as a result of clinical trial start-up activities related to
  the Phase 3 INTRIGUE study in second-line GIST, which the Company
  initiated in December 2018. Expenses related to the rebastinib program
  increased $1.8 million, primarily due to the Phase 1b/2 study of
  rebastinib in combination with paclitaxel, which the Company initiated
  in October 2018, and start-up activities related to the second Phase
  1b/2 clinical trial of rebastinib in combination with carboplatin,
  which the Company initiated in January 2019. Personnel-related costs
  increased $2.5 million due primarily to increased headcount in our
  research and development functions. Personnel-related costs for the
  fourth quarters of 2018 and 2017 included non-cash stock-based
  compensation expense of $1.0 million and $0.5 million, respectively.
  Facility-related and other costs included in unallocated expenses
  increased $2.0 million primarily due to increased costs incurred in
  connection with our early-stage drug discovery programs.
• G&A Expenses: General and administrative expenses for the
  fourth quarter of 2018 were $6.5 million, compared to $4.7 million for
  the same period in 2017. The increase was primarily due to an increase
  in legal and professional fees as a result of various advisory fees
  related to ongoing operations as a public company. Facility-related
  and other costs increased due to insurance costs and higher rent
  expense related to the Company’s new lease. Non-cash stock-based
  compensation was $1.8 million and $2.3 million for the fourth quarters
  of 2018 and 2017, respectively.
• Net Loss: For the fourth quarter of 2018, Deciphera reported a
  net loss of $32.3 million, or $0.86 per share, compared with a net
  loss of $19.9 million, or $0.62 per share, for the same period in 2017.

About Deciphera Pharmaceuticals

Deciphera Pharmaceuticals is a clinical-stage biopharmaceutical company
focused on improving the lives of cancer patients by tackling key
mechanisms of drug resistance that limit the rate and/or durability of
response to existing cancer therapies. Our small molecule drug
candidates are directed against an important family of enzymes called
kinases, known to be directly involved in the growth and spread of many
cancers. We use our deep understanding of kinase biology together with a
proprietary chemistry library to purposefully design compounds that
maintain kinases in a “switched off” or inactivated conformation. These
investigational therapies comprise tumor-targeted agents designed to
address therapeutic resistance causing mutations and immuno-targeted
agents designed to control the activation of immunokinases that suppress
critical immune system regulators, such as macrophages. We have used our
platform to develop a diverse pipeline of tumor-targeted and
immuno-targeted drug candidates designed to improve outcomes for
patients with cancer by improving the quality, rate and/or durability of
their responses to treatment.

Availability of Other Information About Deciphera Pharmaceuticals

Investors and others should note that Deciphera Pharmaceuticals
communicates with its investors and the public using its company website
(www.deciphera.com),
including but not limited to investor presentations and scientific
presentations, Securities and Exchange Commission filings, press
releases, public conference calls and webcasts. The information that
Deciphera Pharmaceuticals posts on these channels and websites could be
deemed to be material information. As a result, Deciphera
Pharmaceuticals encourages investors, the media and others interested in
Deciphera Pharmaceuticals to review the information that it posts on
these channels, including Deciphera Pharmaceuticals’ investor relations
website, on a regular basis. This list of channels may be updated from
time to time on Deciphera Pharmaceuticals’ investor relations website
and may include other social media channels than the ones described
above. The contents of Deciphera Pharmaceuticals’ website or these
channels, or any other website that may be accessed from its website or
these channels, shall not be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, as
amended, including, without limitation, statements regarding our
expectations regarding timing of reporting top-line data from our
INVICTUS pivotal Phase 3 study, the potential for ripretinib (DCC-2618)
to provide clinical benefit and treat cancers such as GIST and other
possible indications, expectations for and the timing of data from our
clinical trials with our investigational agent rebastinib, including,
without limitation, our study of rebastinib in combination with
carboplatin and in combination with paclitaxel, and the potential for
rebastinib, alone or in combination with other agents or chemotherapy to
treat cancers, expectations for presenting data from our studies of
DCC-3014 at a medical meeting, our plans to add TGCT patients to our
ongoing Phase 1 trial for DCC-3014, expectations regarding cash
guidance, launch preparations for a possible commercial launch of
ripretinib in fourth-line and fourth-line plus GIST, if approved, and
expectations regarding designating a new clinical candidate and
IND-enabling studies to support such candidate. The words “may,” “will,”
“could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,”
“believe,” “estimate,” “predict,” “project,” “potential,” “continue,”
“target” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements
contain these identifying words. Any forward-looking statements in this
press release are based on management’s current expectations and beliefs
and are subject to a number of risks, uncertainties and important
factors that may cause actual events or results to differ materially
from those expressed or implied by any forward-looking statements
contained in this press release, including, without limitation, risks
and uncertainties related to the delay of any current or planned
clinical studies or the development of our drug candidates, including
ripretinib, rebastinib, and DCC-3014, our advancement of multiple
early-stage and later-stage efforts, our ability to successfully
demonstrate the efficacy and safety of our drug candidates including in
later-stage studies, the preclinical and clinical results for our drug
candidates, which may not support further development of such drug
candidates, our efforts to scale up drug product manufacturing, our
ability to implement commercial readiness, actions of regulatory
agencies, any or all of which may affect the initiation, timing and
progress of clinical studies and other risks identified in our SEC
filings, including our Quarterly Report on Form 10-Q for the quarter
ended September 30, 2018, and subsequent filings with the SEC. We
caution you not to place undue reliance on any forward-looking
statements, which speak only as of the date they are made. We disclaim
any obligation to publicly update or revise any such statements to
reflect any change in expectations or in events, conditions or
circumstances on which any such statements may be based, or that may
affect the likelihood that actual results will differ from those set
forth in the forward-looking statements. Any forward-looking statements
contained in this press release represent our views only as of the date
hereof and should not be relied upon as representing its views as of any
subsequent date. We explicitly disclaim any obligation to update any
forward-looking statements.

CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
		December 31,
		2018			2017
Assets
Cash and cash equivalents		$	293,764		$	196,754
Prepaid expenses and other current assets			7,273			1,428
Long-term investment restricted			1,069			—
Property and equipment, net (1)			13,453			838
Other assets			–			75
Total assets		$	315,559		$	199,095
Liabilities and Stockholders’ Equity
Accounts payable, accrued expenses and other liabilities		$	22,937		$	13,641
Debt obligations			1,294			1,481
Lease liability, net of current portion(1)			11,347			—
Total liabilities			35,578			15,122
Total stockholders’ equity			279,981			183,973
Total liabilities and stockholders’ equity		$	315,559		$	199,095

(1) In May 2018, we entered into a lease for office space in Waltham, MA. We are not the legal owners of the leased space, however, we are deemed to be the owner during the construction phase because of certain provisions within the lease. As a result, we recorded a $11.9 million build-to-suit asset in property and equipment and a corresponding build-to-suit facility lease financing obligation as of December 31, 2018.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
(Unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2018				2017				2018				2017
Revenue		$	—			$	—			$	—			$	—
Operating expenses:
Research and development			27,356				15,658				82,887				39,514
General and administrative			6,474				4,680				21,212				11,421
Total operating expenses			33,830				20,338				104,099				50,935
Loss from operations			(33,830	)			(20,338	)			(104,099	)			(50,935	)
Other income (expense):
Interest expense			(20	)			(23	)			(84	)			(95	)
Interest and other income, net			1,551				449				4,329				746
Total other income (expense), net			1,531				426				4,245				651
Net loss and comprehensive loss		$	(32,299	)		$	(19,912	)		$	(99,854	)		$	(50,284	)
Net loss per share—basic and diluted		$	(0.86	)		$	(0.62	)		$	(2.82	)		$	(2.99	)
Weighted average common shares outstanding—basic and diluted			37,665,599				32,121,428				35,390,480				16,792,179

Contacts

Media:
Gina Nugent, The Yates Network
gina@theyatesnetwork.com
617-460-3579

Investor
Relations:
Laura Perry or Sam Martin, Argot Partners
Laura@argotpartners.com or Sam@argotpartners.com
212-600-1902

Company:
Christopher
J. Morl, Chief Business Officer
Deciphera Pharmaceuticals, Inc.
cmorl@deciphera.com
781-209-6418